Bonus payment

While the base salary usually is a fixed amount per month, bonus payments more often than not vary depending on known criteria, such as the annual turnover, or the net number of additional customers acquired, or the current value of the stock of a public company.

Thus bonus payments can act as incentives for managers attracting their attention and their personal interest towards what is seen as gainful for their companies' economic success.

There are widely-used elements of pay for performance and working well in many instances, including when a fair share of an employee's participation in the success of a company is desired.

[3] In Jalan Trading v Mill Mazdoor Sabha 1, the Supreme Court stated that the purpose of the Act was to maintain peace and harmony between labour and capital by allowing workers to share in the establishment's prosperity and prescribing the maximum and minimum rates of bonus, as well as the scheme of "set-off" and set-on to not only secure labour's right in the share of profits but also to enshrine in law the principle of "set-off" and "set-on".

New Maneck Choke Spinning and weaving Company V.Textile Labour Association (1961) I LLJ 521 at 526 Supreme Court held that there are four types; 1.